The International Finance Corporation (IFC) said on Wednesday it was investing $2 billion to support small businesses in Africa and boost international trade as part of efforts to bolster the continent’s recovery from the pandemic.
While the pandemic’s impact has been less acute in Africa than in the United States, Europe and now India, the economic fallout has been severe. Sub-Saharan Africa is set to record the slowest economic growth of any world region this year.
The IFC, investment arm of the World Bank, said it would invest $1 billion in new direct financing for micro, small and medium enterprises, including via mezzanine financing and risk-sharing instruments.
Another $1 billion will support international trade finance “to facilitate the flow of imports and exports of essential goods, including food and medical products,” the IFC said in a statement.
“This is a critical time for people, businesses, and economies across Africa. Long-term recovery will depend on getting funding to the pillars of the economy that need it today,” said Makhtar Diop, the IFC’s Managing Director.
The initiatives will be open to public and private partners, the statement said.
The IFC last year announced a global $8 billion fast-track financing facility for help existing clients and their countries’ economies during the pandemic.
More than half has already been deployed, the IFC said, with more than 30% going to IFC clients in Africa.